The impacts of the current crisis on the physical and emotional well-being of our society have been widely reported. Health care systems and professionals have been pushed to the limit, unemployment rolls have skyrocketed, everyday routines have been disrupted and, of course, many lives have been lost. One area that has faced unique challenges is the nonprofit sector, which is dealing with both daunting operational issues (how to deliver services at a distance) and drastic funding shortfalls, with social services nonprofits suffering estimated revenue declines of 19% to 37% over the next six months.2
This is no small matter. Nonprofits play a vital role in the United States, with many providing critical services to populations in need. Their areas of focus may include afterschool care for children, food security to families, health and mental health services, and housing, among others, and may be particularly valuable in the current, extreme environment. How they can successfully adapt and how the community moves to support and engage with them will be critical to their future.
Headwinds at Nonprofits
Survey of Social Service Organizations
Source: Georgia State University, survey of about 400 social service nonprofits across the U.S., April 20 – May 6, 2020.
Fundraising Under Stress
Most nonprofit organizations rely on annual fundraising events to achieve budgetary goals. Fundraisers such as gala dinners, golf tournaments, benefit concerts and auctions are a large source of revenue. Depending on the size of the event, planning may take months and require one or more dedicated staff members to organize. Many nonprofits host their events in the spring, avoiding busy travel times such as summer or winter holidays. Initially, as worries about COVID-19 emerged, organizations often opted to postpone their fundraising events until later in the year. But as social distancing practices came into place, and hospitalizations soared, many large events were simply cancelled.
With critical revenue at stake, organizations needed to decide quickly if fundraisers would be held virtually—and if so, what approaches would be most effective and interesting for participants. For example, Covenant House, an organization that provides shelter, food, crisis care and other services to homeless and runaway youth, held a 90-minute virtual fundraiser in May, streaming on platforms such as Amazon Prime Video, YouTube and Facebook. The event included performances and appearances by actors, musicians and comedians.
Other nonprofits that did not wish, or were unable, to host virtual fundraisers appealed to their usual sponsors and donors through phone calls and email campaigns, asking for continued support. Thankfully, many found that previous commitments from corporate sponsors, board members and other supporters were left intact.
Government support has also helped bridge the financial gap. However, although some nonprofits were eligible to apply for loans under the federal government’s Paycheck Protection Program (PPP), levels of forgiveness and repayment are somewhat uncertain.2 Moreover, state budgetary constraints could take a bite out of available liquidity; New York State, for example, anticipates cutting aid to localities by $8 billion, much of which could be slated for nonprofit use.
Tough Choices on Service
One key issue has simply been competition for dollars. With many habitual donors under stress themselves, nonprofits that typically provide services rather than funding or tangible items like food, clothing or supplies have had trouble attracting attention. Even where afterschool care and other programs have been cancelled, the critical needs they address have not. These organizations have faced difficult decisions on layoffs and other crucial matters, even while thinking creatively about shifting services online.
For example, Covenant House Texas,3 which largely works in person, chose to close its youth engagement center for drop-in services, converting it to a youth patient center with additional beds and cots to accommodate young people who had lost their jobs and needed a place to stay.
Project SYNCERE, based in Chicago, seeks to increase the number of minority, female and underserved students pursuing careers in science, technology, engineering and math. It shifted much of its programming to virtual formats. Adjustments have included mailing (instead of directly providing) materials to students, training staff to conduct services electronically, taking virtual field trips with volunteers, and offering classes in Spanish online.
Rallying Around Nonprofits
While service providers face myriad challenges, several positive initiatives have taken place to support the nonprofit world. “GivingTuesday” was established in 2012 to encourage people to donate to their favorite causes, and it has typically been held on the Tuesday after Thanksgiving as a play on the “Black Friday” and “Cyber Monday” retail traditions. This year, it was tweaked to become “GivingTuesdayNow,” and was held on May 5 as an emergency relief effort for organizations working to fight COVID-19. Donors from more than 145 countries provided money, goods and time to nonprofit organizations, with many companies encouraging their employees to participate.
In addition, large communal funds were established for organizations to apply for grants, similar to disaster relief responses after 9/11 and Hurricane Sandy. Through the New York City Community Trust, the NYC COVID-19 Response & Impact Fund was created to aid nonprofit service providers struggling with the initial health and economic effects of the pandemic. It raised $110 million from nearly 1,300 donors, and distributed nearly $73 million in grants and $37 million in no-interest loans to nonprofits. Similarly, the Robin Hood Foundation created a COVID-19 fund, giving away nearly $30 million in 258 grants across New York City.
Next Steps for Nonprofits and Their Supporters
As the world battles COVID-19, many nonprofits will continue to cope with an array of issues related to funding uncertainty and service adjustments. For donors, whether individual or institutional, we believe the most straightforward way to ensure the stability of these nonprofits is to continue giving, volunteering and advocating.
In terms of giving, providing for general operating support rather than mandating that funds be directed toward certain programs provides charities with more flexibility to put the money where it is needed—whether salaries, support for needy clients or operational funding. The unpredictability of recent months has underscored the importance of that flexibility. For volunteers, focusing on what nonprofits say they need most (rather than what the volunteer may prefer to do) may be appreciated.
Still, money and volunteer work by themselves are not always enough. Contacting elected officials, sharing views and participating in awareness campaigns can help change government and societal priorities, and potentially lead to more support for crucial organizations. Recent publicity around economic equality and racial justice have contributed to an important dialogue regarding the operations and emphasis of nonprofits. For example, a recent New York Times article4 found that “among organizations focused on improving the outcomes of black boys…groups with black leaders had 45% less revenue, and unrestricted assets that were 91% lower, than their counterparts with white leaders.” Without weighing in regarding the underlying reasons in this case, the fact that such disparities are gaining attention can help nonprofits steer their course more effectively—and help their supporters uplift these organizations, which are dedicated to uplifting so many.
Your Nonprofit Needs You
In an environment of social and economic hardship, organizations dedicated to helping underserved populations need your support and involvement more than ever.
- Prioritize: Think about today’s most pressing needs and where your contributions and efforts could make the most difference.
- Get Involved: Nonprofits are struggling for attention and dollars; your participation can help provide a bridge to more normal circumstances down the road.
- Channel Your Expertise: A rapid shift to digital engagement has forced many organizations to improvise online. Facilitating this transition could be a true “value-add.”
- Show Up: With reduced lockdowns and better precautionary measures, it may be feasible to volunteer on location. However, personal safety must remain paramount.
- Advocate: If a nonprofit or cause is vital enough for your contribution, it is probably also worth the use of your voice to make a difference.
- Outreach: Tap into your networks and share with others how you are supporting your local organizations to expand potential reach.